U.S. Postal Rates excel in International Comparison

There is a lot of upset in the U.S. mailing community over the proposed USPS rate increases. Especially high volume mailers are trying to fight this and have now declared war on USPS under the umbrella of the newly founded Affordable Mail Alliance. There are calls for USPS to become more efficient and to address various labor issues. But how do you define or measure efficiency?

Could the price of postal products turn out to be a key indicator for a postal operator’s efficiency? That question we cannot answer. But we went ahead anyways, and compared the USPS letter postage to the rates of European postal operators. We found, that in comparison to most European operators, the USPS letter rates are amongst the cheapest to be found. Additionally, USPS is covering a much vaster geographical area than the European postal operators. In an international context the U.S. Postal Service is offering a very fair deal on their products.

Comparing letter rates of U. S. Postal Service with European Postal Operators

Deutsche Post has published a chart showing “domestic standard” letter rates in Europe. (A domestic standard letter in Europe is comparable with a first class letter in the U.S.). USPS has proposed a price of 46 cents for a first class letter, which is currently 33.6 Euro cents. This places USPS right between Hungary and Estonia.

To have a more realistic comparison of letter prices we also like to consider cost of living and purchasing power. Purchasing power in Germany is said to be 8% higher than in the U.S. , or equal. It is a pretty good guess to say, that one Dollar in the U.S. equals one Euro in Germany.

In the following chart Deutsche Post has adjusted the letter prices according to each country’s purchasing power. We inserted the USPS letter rate into this chart with 46 Euro cents ($0.58)

Geographical areas covered by postal operators

Click here to open up a new window with an interactive map, overlaying Europe with the USA. (You need to scroll down a tad to see the map, then click and drag the Red Dot to move the U.S. over Europe).

The bottom line is, that USPS is not only offering cheap rates in comparison with most European postal operators, but it simultaneously fulfills the universal service obligation for a much vaster geographical area, than any of the European postal operators. U.S. mailers are truly getting a bargain. Most just don’t know it.

3 Comments

The problem is that junk mail efitfecvely subsidizes first class mail, and any way to screen it would result in a much higher cost for everyone else.I do think the app idea is good if FedEx can keep track of packages for no cost, there’s no reason we couldn’t do it for mail, other than perhaps each individual needing a mail-user ID# so that a machine could quickly read all pieces of mail and tell you that you, James Kanka, have six pieces of mail in transit in the USPS network, three of which are at your post office now. I think that right now, USPS needs to come up with a plan to slowly shift away from their current model. Realistically, you could switch to three-day-a-week delivery (half the town gets mail Monday, Wednesday, Friday, and the other half gets mail Tuesday, Thursday, Saturday) without affecting anyone’s life too much. Businesses could pay to get five-day delivery, if they thought they needed it. But I think (and I’m guessing, these aren’t facts) that about 90% of people over 35 would demand regular delivery in some form. As the demographics shift, there could be a greater transition away from delivery: twice a week, once a week, then once a month, with a mailbox for you at your local post office. That transition would take a lot of time fifteen to twenty years, maybe more. Maybe by then mail will be totally obsolete, other than shipping from online retailers, and they’ll have to come up with another gameplan. But a dramatic shift now would be legislating to a lot of people who love the mail and can’t imagine life without it. I don’t agree with those people, but I don’t think you can totally ignore their feelings.Of course, this would all be moot if the USPS didn’t have a monopoly on the delivery of first-class mail. Remove that, let the market sort it out, and it doesn’t much matter what you or I think as individuals.

I wish I could scream it from the highest mountain that Congress passed the Postal Reform Act in 2006 which required us to prefund our retirees health benefits 75 yrs. into the future. This takes 5.5 BILLION dollars away from us each year. We have OVERFUNDED some of our pension plans. Had we been relieved of these OUTRAGEOUS burdens, the whole world would see that we provide the highest quality product at one of the cheapest rates on the planet. Since we have a supplemental work force,as mail declines,so do they.